Analysis

Tough conditions see SMEs seeking new government leadership

More than two thirds of local SMEs believe the economy will decline in the coming year Dissatisfaction with Government performance sits at 60% National’s Christopher Luxon leads preferred PM poll by 17 points Low economic confidence underpinned by revenue struggles, profitability declines, rising inflation, and the lingering impacts of the Covid-19 pandemic, is prompting more local SME owners and decision makers to seek a change in the country’s leadership, according to new data from the 2022 MYOB Business Monitor. The nationwide survey of over 1,000 SME owners and managers – running annually since 2009 – highlighted that confidence in the economy was approaching levels last seen during the first outbreak of the pandemic in March 2020, with large numbers of SMEs reporting falling revenue and slowing quarterly activity. More than two thirds (68%) of local SMEs believe the New Zealand economy will decline in the next 12 months. Over a quarter (29%) expect that decline to be significant, while in contrast just 16% of SMEs believe the economy will improve over the coming year. MYOB Head of Go-to Market, Jo Tozer, explains that the steep decline in SME confidence follows a perfect storm of conditions negatively affecting business operations. “If we just look back over the past six months, SMEs have had to navigate a tough second half of 2021, worsening supply chain disruptions and inflationary pressures, and a new Covid-19 outbreak hampering operations and staffing abilities in the first few months of this year,” says Jo. “It was concerning when we saw the proportion of SMEs saying they expected the economy to decline reach 55% in October last year – up from 41% in March, but these latest confidence numbers are even more worrying. “With the exception of when Covid-19 initially reached our shores and we entered the first […]

Industry 4.0 in Focus

From NZ Manufacturer magazine – April issue. -Bob Hawley, Managing Director, Red Steel Limited HERA member Red Steel had its foundations laid in the 1960s as a building company specialising in steel construction. It was officially formed in November 2002 before purchasing Woolaway Steel Structures in January 2003. Red Steel specialises in structural steelwork and undertakes contracts predominantly in the lower North Island of New Zealand from its purpose-built facility in Pandora, Napier constructed in 2015. HERA spoke to Managing Director Bob Hawley about the future of steel, the impact of Industry 4.0 and some of the challenges and opportunities the company is facing. How are you finding current business conditions? Getting work is not an issue. The challenge going forward is the planning to ensure we have the resources required to fulfil our clients’ requirements. Often we are fabricating projects before they are needed because we have the time to fabricate it now, whereas we can see in two months’ time, for example, when a client might need the job, we haven’t got the fabrication capacity. This goes against the ‘just in time’ manufacturing process but becomes necessary as construction programmes are constantly changing. Also impacting are the other trades that have constraints with material supply – we might be on programme but the project gets delayed whereas another project hasn’t. It is a big juggling act. How has your company been impacted by the pandemic? The lockdowns had a large impact, but at the moment it is probably harder. With lockdowns all trades stop working and projects just start again from where they left off. Everyone is in the same boat. At one point recently we were nearly a third of the staff down so our fabrication output was reduced but work continues on site and we are […]

SAP research finds cultivating curiosity helps Kiwi businesses retain talent

A curious workplace culture contributes to attracting and retaining talent, by increasing engagement and reducing burnout among employees. SAP has found New Zealand companies that foster a more curious culture* experience major competitive benefits, including higher levels of employee satisfaction and engagement according to new research released today. ‘Capitalising on Curiosity’ , a survey of senior business leaders and employees across Australia and New Zealand, found that employees in New Zealand who work for organisations with a curious culture are much more likely to say they are satisfied in their current role (82 per cent) than those who do not work for curious organisations (46 per cent). Dr Amantha Imber, organisational psychologist and founder of behavioural science consultancy Inventium, says that job satisfaction is affected by how people think and feel about their role. “When people are satisfied in their role at work, they’re more engaged, productive and loyal to the organisation. Those working in curious organisations are more likely to feel their work has purpose and more likely to be more creative and innovative, which results in better performance and better outcomes.” Curiosity boosts engagement Innovative approaches to ways of work and recruitment are more critical than ever. Eight in ten senior business leaders in New Zealand believe a culture of curiosity is important for their organisation, a number that increases slightly to 82 per cent when factoring in the need to adapt and grow in the current challenging business environment. New Zealanders working at organisations with a curious culture are much more likely say they feel engaged at work in their current role than those who say they work in incurious organisations (84 per cent compared to 49 per cent). And in today’s tight labour market, almost half of employees surveyed (48 per cent) would consider leaving their […]

Irene Kaur one of the women changing the engineering industry

Kiwi electrical engineer Irene Kaur is by any measure breaking new ground. The STEM movement – now active in education sectors in many countries – is designed to attract more girls and women to fields that have traditionally been defined and dominated by men. Science, technology, engineering and mathematics have in the past had a lack of appeal to females as a career opportunity, due to it being seen as a male-dominated field, lack of awareness and promotion as a viable career opportunity for woman As of today, the percentage of female graduates in electrical engineering at the University of Auckland shows the imbalance still remains persistent: 2017 2018 2019 2020 2021 % female 16% 24% 16% 24% 29% Part 4 -female 10 18 9 10 16 Part 4 -male 52 58 49 31 40 There are only four female chief executives on the NZX50, and according to one of them, Spark’s Jolie Hodson, the tech sector has roughly a 70:30 male to female skew. In light of the clear inequity, many organisations are taking it upon themselves to look at how they can better support females and diversity in the workplace, including looking at key initiatives like flexibility, equal opportunities, ongoing training and support. Schneider Electric has been named as one of the 25 companies engineering students most want to work for, based on a global survey (conducted September 2020 to May 2021) by Universum of 84,000 students from 10 of the world’s biggest economies – the list ranks Schneider Electric alongside the likes of Pfizer, Apple, Google and Microsoft. Part of the attraction is creating a culture and ethos that are welcoming to women, and Kiwi electrical engineer Irene Kaur (pictured) is by any measure breaking new ground – but she doesn’t see herself as knocking down barriers for women […]

Meeting manufacturing’s cyber security challenges

Scott Leach, Vice President APJ at cybersecurity firm Varonis In February 2021, Security Intelligence reported a 156 per cent increase in ransomware attacks on manufacturers worldwide.Some of the biggest attacks included a demand for $US17 million from a Taiwanese laptop maker and another attack for $US34 million from an electronics manufacturer for Apple. Verizon’s 2021 Data Breach Investigations Report also found the manufacturing sector facing a significant increase in ransomware attacks. These accounted for 61.2 per cent of all breaches in the sector analysed by Verizon. None of these reports offered any reason for this surge in attacks on manufacturers. Still, it has been well-reported that the increasing interconnection of legacy operational technology (OT) and newer information technology (IT) systems has greatly increased the attack surface for manufacturers. OT can now be compromised to gain access to IT, and vice versa. To make matters worse, OT systems were historically isolated from the internet and therefore were not designed to face cyberattacks. Manufacturers must double down on security, and ensure their data is protected and managed safely. This is particularly important for customer data and intellectual property, which could be extremely valuable to a rival organisation. Taking a data-centric approach to security Traditional security measures rely on a ‘walled garden’ approach. Anyone within the walled garden–i.e., employees, contractors and those granted network access–are automatically assumed to be trustworthy, and not verified. Instead, a data-centric approach utilises a zero-trust model, where no-one is assumed to be trustworthy and every access attempt to sensitive data is verified. Typically, the identity of the accessor, the device they are using, their location and the data they are seeking access to are all checked against pre-authorisations. There are plenty of technology solutions available to implement a zero-trust policy. The hard part for any large organisation that […]

Technologies enable smart factories to self-adapt

By Jarrod Kinchington, Infor ANZ vice president and managing director Judging by the headlines, continuous logistics issues, continued pandemic restrictions, and rising prices for raw materials will mean that manufacturers have their work cut out for 2022. In addition, the drive towards sustainability is adding pressure to readjust the manufacturing footprint. Most manufacturers are still stuck with a geographic footprint, which was driven by labour arbitrage around the globe, rather than by factors such as closeness to customers or ecological concerns. To increase efficiency, many producers have started to implement Industry 4.0 technologies. Industry 4.0 came with the promise of a smart factory being profitable at the production lot size of one unit. The concept was introduced at the brink of the millennium change with the introduction of cyber-physical systems to share, analyse and guide intelligent actions for various processes in the industry to make the machines smarter and to lower downtime. Analytics can also be used for other aspects like logistics, demand forecasts, production scheduling and quality control, capacity utilisation and efficiency boosting. But we still stand at the beginning for leveraging the true potential of Industry 4.0. Smart technologies offer no less than the possibility to redesign the global manufacturing footprint, to position factories closer to markets, reduce logistics nightmares and increase visibility of the ecosystem partners, including suppliers and customers. There are six important ingredients for a strategy to create the future-proof smart factory: Customers increasingly demand highly personalised products as well as an enhanced customer experience. Manufacturing companies adopt highly agile cloud-based solutions to gain the ability to increase individualisation, service additions, and serve higher flexibility requirements. The need to reduce delays and transport costs, as well as the drive toward a more sustainable production and the imperative to reduce the distance to the physical end-consumer […]

Industry 4.0 technology proposed to ACC to augment and improve employees lives through use of wearable tech

-Greg Buckley, Innovation and Transformation Architect, HERA Late last year HERA, with industry partners, submitted an expression of interest to ACC’s Injury Prevention Fund, which invited EOIs specifically relating to innovation to reduce harm and injury in the workplace associated with psychosocial and mental health risks. We have since engaged further with ACC and submitted a full proposal explaining how these risk factors could be reduced in sectors relating to our organisation through the use of Industry 4.0 technology. The potential employee wellbeing and financial benefits from better management of psychosocial risk factors in higher-risk workplaces (such as construction and heavy engineering) are massive. In 2020, approximately 170,000 workers were employed in the New Zealand construction sector, with the ACC-related cost of the construction sector totalling nearly $450m over the past three years. HERA currently has 250 member organisations with around 25,000 workers in total, which equates to an approximate ACC cost per annum of nearly $22m. What is HERA, with its partners in innovation, proposing to introduce with the support of ACC? A three-year programme of work, including ongoing research, which involves the deployment of wearable technology to track biological and physiological markers among employees who work in fields where heavy machinery is operated. The programme is aligned with emerging research on the link between the stress response and bio-markers that indicates an individual’s propensity to psychosocial risk and negative mental health impacts. By measuring health vitals such as heart rates and sleep cycles – as well as other bio-markers associated with stress – the wearable technology can track individual responses and overlay this data with survey data on mental health submitted by each employee. It is an example of using wearable tech to gather and marry up data to optimise health and safety in the workplace. If someone […]

Six tips for going circular (from manufacturers who are doing it)

-Jim Goddin, thinkstep-anz Every expert was once a beginner – and that includes the three New Zealand and Australian manufacturers who share their circular economy (CE) expertise here. Ged Finch, Jason Graham-Nye and David Bell run or work in manufacturing businesses based on CE principles. Ged is R&D Manager at XFrame, a business which designs and manufactures reusable prefabricated structural framing. Jason co-founded gDiapers which designs and makes compostable nappies. David is Manager Sustainability and Insight at steel recycler, manufacturer and distributor InfraBuild. Our three experts have learned a lot about CE since they started out. In a recent thinkstep-anz webinar, they shared their tips for taking a manufacturing business circular. Their advice is relevant for businesses that design and manufacture their own products and for contract manufacturers too. Before we hear from our experts, here’s a look at CE and how it can add value to your manufacturing business. Circular economy in a nutshell CE is often confused with recycling. It’s much (much!) more. CE is based on three principles. Here’s how they play out in the real world of product design and manufacturing at XFrame, gDiapers and InfraBuild. Principle 1: designing out waste and pollution XFrame estimates that their reusable framing can reduce construction waste from a single home by up to 5 tonnes. gDiapers’ products eliminate waste from disposable nappies. InfraBuild recycled 1.4 m tonnes of scrap metal in Australia in 2021. Principle 2: keeping products and materials in use More than 95% of the materials in an X-Frame building can be recovered and reused, many times. The materials in gDiapers’ nappies can be composted and put back into the soil. InfraBuild keep materials in use by feeding their electric arc furnaces with 100% scrap metal wherever possible. Principle 3: regenerating natural systems The timber XFrame use to manufacture […]

How to master manufacturing’s data and analytics revolution

Manufacturing is on the verge of a data-driven revolution, but like all revolutions it will require the right actions, individually and collaboratively, to realise its full potential. Within a few years, manufacturers will collaborate in hyperconnected value networks in which data‑and‑analytics applications drive productivity, new customer experiences, and societal and environmental effects. Indeed, data and analytics are a key driver in realising the “Factory of Future” by enabling transparency, predictions and autonomous systems. Already today, we see leading manufacturers applying data and analytics to achieve their objectives for efficiency, sustainability and resilience. The imperative to boost efficiency and productivity is driven by intense cost pressures as well as liquidity issues arising from Covid-19 pandemic-related business disruptions. Sustainable operations are at the top of the agenda for many companies.. At the same time, they are seeking to build more resilient and connected supply chains, so they can anticipate and react faster to disruptions. Most companies recognise that data and analytics are rapidly changing the way they manufacture goods. Despite the high ambitions and strong value proposition, companies have not yet tapped the full potential. A triad of interconnected success factors Successful companies have demonstrated that three elements must be combined to drive full-scale implementation of data and analytics. First, they focus on value in selecting applications. Second, they establish a solid technological backbone comprising both information technology (IT) and operations technology (OT). Third, they promote organisational readiness to ensure that investments deliver the anticipated returns. Examples from various industry sectors demonstrate the importance of these success factors: Petrochemicals: A large petrochemical client of Schneider Electric is leveraging advanced process control to improve asset productivity and energy consumption in a highly complex integrated plant. The advanced process control is informed by an accurate digital twin based on a thermodynamic model. Moreover, effective visualisation […]

Migrant pay gap research reveals concerning inequities

New research into the migrant pay gap in New Zealand has revealed concerning inequities between migrants from different countries of birth. The report, commissioned by Diversity Works New Zealand, shows that migrants from South Africa, Northern America, the United Kingdom and the rest of Europe all earned a higher average hourly wage than migrants from Asia, the rest of the Americas, Polynesia, Melanesia, and Micronesia. Even when the data was adjusted to compare migrants with similar levels of skills, English language ability, time spent in New Zealand and age, those born in places like Asia and South America earn significantly lower average wages than migrants from Europe and Northern America, says Diversity Works New Zealand Chief Executive Maretha Smit. “In 2018, engineering professionals from the UK, South Africa, and Northern America all earned an average wage above $45 an hour. In contrast, engineering professionals from India, China, and Polynesia all had hourly wages below $40.” Business and Economic Research Limited (BERL) looked a variety of datasets to determine whether there was a migrant pay gap in New Zealand. Key points from the report Migrants from South Africa, Northern America, the United Kingdom (UK), and the rest of Europe all earn a higher average hourly wage than migrants from Asia, the rest of the Americas, Polynesia, Melanesia, and Micronesia. Even when the data was adjusted to compare migrants with similar levels of skills, English language ability, time spent in New Zealand and age, there are inequities based on place of birth and ethnicity. Contributing factors to the migrant pay gap include cultural and language differences, institutional barriers, structural bias and discrimination. Migrants who spoke English and another language were more likely to earn a lower wage than migrants who spoke English only. Migrants from English-speaking, advanced countries can transfer their qualifications […]

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